In 2014, the company maintained its market share at about 3.6%; funds under management are invested in equities, fixed income securities, index constituents or other mutual funds, in line with their respective mandates. Two of the mutual funds, having limited size, are proposed to be merged into another fund, following which number of mutual funds under management (FUM) will reduce to 9. In relation to peers, the performance of equity/aggressive asset allocation/balanced FUMs has largely remained favorable. Returns of income/cash funds have declined in line with market benchmark rates; returns are largely in line with peers. Tracking error of index fund reduced while return of fund-of-funds improved as allocation to equity schemes was enhanced. The investment management team is supported by research function while compliance and risk, as a combined function, monitor various aspects pertaining to regulations and market risk. Scope of risk management may be enhanced, going forward.

Earlier in FY14, JSIL experienced a change at the helm, with Dr. Ali Akhtar Ali assuming the office of Chief Executive Officer; he was previously serving as the Chief Investment Officer (CIO) of the company. Following this change, the position of CIO is currently vacant. The company also experienced turnover at the position of Head of Internal Audit; currently an in-house resource has been assigned an acting charge while the company is looking to hire a permanent resource. Hiring has also been undertaken in research function. Stability in management team is considered essential.

The management’s focus is geared towards strengthening the retail outreach of the sales team to grow its existing funds; additional funds are not planned to be launched. Recent changes at the regulatory level further underscore the importance of tapping the retail market to develop a sustainable investor base. Additional resources are being hired by JSIL to reach out to its target market. In addition to the development of in-house sales team, progress has also been made recently in finalizing modalities for enhancing the utilization of the parent bank’s network for generating sales. JCR-VIS will continue to monitor the results of these initiatives.

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JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy
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